When times are bad and the banks lose money, officials say sorry ALL of you ordinary people got to lose a big part of your bank savings (by a government decree - minus 10 per cent) to save the economy.

Of course everyone in Cyprus is rushing to withdraw ALL their savings from the Cypriot banks.
Which will lead to the rapid collapse of all Cypriot banks.
What kind of incompetent EU official thought of this.

Senior Member

Quote:A bank account is not a bond or a stock or any sort of investment. This seems to be lost on many people. A bank account is the private property of a citizen or a corporation and does not belong to the government.
UnQuote.

Senior Member

Quote:
A bank account is not a bond or a stock or any sort of investment. This seems to be lost on many people. A bank account is the private property of a citizen or a corporation and does not belong to the government.
UnQuote.

This opposes Traditional Asian Values (tm): first got country, then got family. Got family then got you. You belong to your family. Your family belongs to your country. And the government of the country is the Mandate of Heaven to run the country as they see fit. Any question? Chinese philo class dismissed.

The thing is that there is no coordinated tax reform across the EU. The greeks and italians don't pay taxes, as well as corporations using Ireland and Netherlands to pay zero tax.
UK is trying to lure capital flight from France and elsewhere. Singapore ? Too much already.. ;p

Senior Member

&#8226; France - Not me! It was Cyprus government's idea
&#8226; Germany - Not me! It was Cyprus government's idea
&#8226; European Central Bank (ECB) - Not me!
&#8226; Cyprus President - Not me! The EU tried to force this on us in Cyprus and we are likely to vote it down.
&#8226; All Cyprus banks - Not me!

Cyprus citizen when interviewed - we blame our own Cyprus president for bending to the pressure by the EU and also blame the EU - especially Germany. The banners read: &#8220;Merkel, you stole our life savings&#8221; & &#8220;Europe is for its people, not for Germany&#8221;.

Russian President Putin on this stupid idea : "unfair, unprofessional and dangerous"

Senior Member

Quote:Dimitris Drakopoulos from Nomura said a large chunk of the &#8364;70bn in deposits in the Cypriot banking system belong to banks from Russia, UK, Singapore, and Lebanon. Most have no more than a "brass plate" presence on the island, and are not linked into the economy in any meaningful way.UnQuote

Thats because the decision is not final yet. A lot of people concerned, not for the poor citizen, but because it can set a dangerous precedent.
From what I've read, either they pay up, or the EU will let Cyprus' 2 biggest bank fail, which.. is not a pleasant alternative.
In short, its a better pill to swallow. I sympathize with them, I think they did nothing wrong, compared to Greece, Italy and Spain.
And the Germans are not too happy either.. its their money they are lending.

Senior Member

The Cyprus banks closed to prevent people from withdrawing ALL their savings.
The ATMs only allow maximum limit of 200 Euros to 400 Euros. Some ATMs have stopped functioning (no top ups of cash in machine).

Want to see something frightening?

Wait for the Cyprus banks to reopen in next 1 or 2 days. See it on CNN.
Thousands of bank depositors screaming, crying, struggling to get into the banks to take all their money out. Before the banks announce they have collapsed.

New Member

Thats because the decision is not final yet. A lot of people concerned, not for the poor citizen, but because it can set a dangerous precedent.
From what I've read, either they pay up, or the EU will let Cyprus' 2 biggest bank fail, which.. is not a pleasant alternative.
In short, its a better pill to swallow. I sympathize with them, I think they did nothing wrong, compared to Greece, Italy and Spain.
And the Germans are not too happy either.. its their money they are lending.

The vote happens later at 1600gmt, if it's not delayed again. Regardless of outcome, and assuming the bailout plan remains unchanged, there's likely to be a sharp drop in the markets tomorrow, but after 1 week everything will be back to normal.

Senior Member

Quote:Dimitris Drakopoulos from Nomura said a large chunk of the &#8364;70bn in deposits in the Cypriot banking system belong to banks from Russia, UK, Singapore, and Lebanon. Most have no more than a "brass plate" presence on the island, and are not linked into the economy in any meaningful way.UnQuote

Senior Member

Now they have decided to further close all the Cyprus banks until Tuesday. All electronic fund transfers are down.
So how is the country going to function?
Can people get money from the empty ATMs to buy their groceries?

How do the Cyprus businesses deal with their overseas customers and suppliers? How to get payment? How to make payment?
All big businesses stop in the whole country?

&#8226; There was a bank deposit guarantee up to a certain amount (maybe $100,000) in force. The original idea was to renege on this bank deposit guarantee and take money by force. That's how crazy it was.

&#8226; Euros deposited in a bank in Cyprus is not the same (less) than Euros deposited anywhere else in EU? Wow!
The currency cannot have split levels.

&#8226; It begs the question: If they can do it to Cyrus bank deposits, why can't they also do it to Spain, Portugal, Italy, Greece, Ireland, Iceland? So everyone is having the jitters.

&#8226; When Cyprus is on verge of financial collapse, the Cyprus Finance Minister is full time away in Russia asking for help -instead of being in the EU that is supposed to help its member countries. The EU is a joke.

Senior Member

Senior Member

Uncle, Cyprus banking system is backed up by Russian oligarchs aka Russian rich towkay like Abramovich , etc.
secondly EU states always require this and that assurance or action...very troublesome for Cyprus.

anyway if you want to make some money please go speculate on EURUSD, EURJPY, they have great volatility to run about it. if really cannot tahan straight out risk taking do consider buying put forex options on EUR majors

The EU is not a joke, it is a night mare.

2000 years ago, a stupid commander called Cao Cao thought it would be a great idea to couple 1000 ships together for "stability" . One burn all burn!
These idiots at the EU or European Community (its predecessor) did not read Romance of the Three Kingdoms apparently.

I blame Lee Ang for not making his movie earlier. The politicians would have said "Alamak, we were about to do that exact same thing". They would then facepalm, and not make currency union and common market. Schengen agreement is actually just sufficient for all the economic activity already anyway.

Senior Member

Now they have decided to further close all the Cyprus banks until Tuesday. All electronic fund transfers are down.
So how is the country going to function?
Can people get money from the empty ATMs to buy their groceries?

How do the Cyprus businesses deal with their overseas customers and suppliers? How to get payment? How to make payment?
All big businesses stop in the whole country?

&#8226; There was a bank deposit guarantee up to a certain amount (maybe $100,000) in force. The original idea was to renege on this bank deposit guarantee and take money by force. That's how crazy it was.

Stop talking nonsense laa. They are not reneging this guarantee. Guarantee just mean in the event of bank runs, the government, via central bank (or like the federal depositors insurance in the US) will give you your money, up to the guaranteed amount.
What they were planning is to tax people by directly debiting their savings in the bank. Not essentially the same thing, but effectively achieve same effect, which is to take the people's money.
The problem now is.. by rejecting the tax, EU will not bail out the banks. Without it.. the gov will not have the money to back the guarantee.
So.. its their choice.. taxed 6.75%.. or risk to lose 100%.